As manufacturers enter 2026, uncertainty continues to define the industry, volatile demand, shifting tariffs, reshoring pressures, and rapid technology adoption are reshaping workforce requirements. Deloitte’s 2026 Manufacturing Industry Outlook highlights a reality every SMB manufacturer now feels: the competition for skilled labor has never been more intense.
According to Deloitte, one-third of executives say their top concern is equipping workers with the right skills to maximize smart manufacturing investments. Immigrant labor, filling almost a quarter of U.S. manufacturing production roles, remains impacted by shifting policies. Unpredictable construction timelines and volatile demand make labor needs swing sharply.
Source: Deloitte 2026 Manufacturing Industry Outlook (Talent Section).
But while the challenges are big, small and mid-sized manufacturers are uniquely positioned to be agile, if they update the way they plan, source, and support their workforce.
At PeopleWorX, we believe something simple but powerful: People Matter. Technology helps, but people carry manufacturing forward. And when SMB manufacturers combine smart workforce strategy with the right HR + payroll infrastructure, they gain a long-term talent advantage, even in a tight labor market.
The Talent Pressure Is Real and Growing
Manufacturers are facing simultaneous workforce challenges:
- Skill gaps expanding as automation and digital tools accelerate
- Reshoring increasing demand for already scarce skilled workers
- Long hiring and training cycles slowing response to market shifts
- Retention pressures driven by higher pay expectations and more choices for workers
The reality? Small and mid-sized manufacturers do not have time or margin for missteps. Workforce planning must become more intentional, scalable, and smarter.
Why the Build, Buy, Borrow Model Works for SMB Manufacturers
Deloitte recommends a flexible workforce model, Build, Buy, Borrow that helps manufacturers stay agile while developing long-term talent strength.
Below is what the model means through a PeopleWorX lens—rooted in people-first support and practical workforce management.
1. Build: Invest in Your Core Workforce
Building talent internally is the most sustainable option, but it requires the right tools and support. Manufacturers should strengthen:
- Skills training & upskilling aligned with smart manufacturing
- Employee experience & retention programs
- Wages + non-wage benefits (childcare, transportation, shift flexibility)
- Clear growth pathways supported by training, LMS tools, and certifications
PeopleWorX supports the “Build” approach by giving manufacturers:
- A Learning Management System to upskill faster
- Integrated time, training, and performance data
- Payroll accuracy that builds trust and retains workers
- Dedicated HR support to help build policies for long-term retention
This is how SMB manufacturers create a world-class workforce without big-enterprise complexity.
2. Buy: Recruit External Expertise When It Matters
Sometimes you can’t wait to develop a specialty skill internally. Buying talent means:
- Bringing in experienced technicians
- Hiring workers with digital/automation expertise
- Recruiting leaders who can manage new production methods
But the process is slow and expensive without infrastructure.
With PeopleWorX:
- Applicant Tracking helps manufacturers source faster
- Digital onboarding reduces downtime
- Payroll, compliance, and labor allocations are set right from day one
3. Borrow: Scale Your Workforce Without Overcommitting
Borrowing talent, using temp labor, contractors, or third parties, helps manufacturers flex up or down without long-term burden.
What SMBs need is governance:
- Compliance with overtime, wage, and temp labor rules
- Clean labor allocation to projects or client jobs
- Tools to track hours accurately
PeopleWorX solves this by giving manufacturers:
- Time tracking by job/client
- Automated compliance and PTO rules
- Multi-state payroll when production spans locations
- Dedicated reps who walk SMBs through seasonal or project-driven fluctuations
When your labor mix changes weekly, the right workforce platform matters.
Modern Workforce Planning Requires Better Technology, and Human Support
Deloitte highlights how agentic AI and smart systems are reshaping training and knowledge capture. For SMB manufacturers, this is an opportunity, not a threat.
You don’t need a giant HR department.
You need the right tools connected to real human support.
PeopleWorX provides:
- Skills-based workforce modeling
- Digital onboarding + LMS
- Time & labor allocation
- Expert HR guidance to shape hiring, retention, compliance
- A dedicated representative who learns your operation
Your people get what they need.
Your supervisors gain clarity.
Your leadership gains control.
The Manufacturers Who Thrive in 2026 Will Share One Trait
They will build a people-first workforce strategy grounded in flexibility, supported by modern tools, and guided by experts, not ticketing systems.
PeopleWorX helps SMB manufacturers manage uncertainty with:
- Accurate payroll
- Smart timekeeping
- Compliance you don’t have to chase
- Learning and performance systems that build skills quickly
- A dedicated rep who actually knows your business
This is how small manufacturers compete with big ones:
They combine the right technology with the human support they deserve.
FAQs
1. What is the biggest workforce challenge manufacturers will face in 2026?
The largest challenge is the growing shortage of skilled labor, especially technicians and digitally capable workers, as manufacturers expand smart manufacturing and automation.
2. How does the Build, Buy, Borrow framework help small manufacturers?
It gives SMBs a flexible way to meet demand: build core talent, buy specialized expertise, and borrow temporary labor to handle fluctuations without long-term cost.
3. What role does HR technology play in manufacturing workforce planning?
Modern HR tech enables accurate time tracking, skills-based scheduling, training, compliance, and onboarding, all critical for managing fluctuating labor needs.
4. How can manufacturers improve retention in a competitive labor market?
Retention improves when pay is accurate, scheduling is predictable, training is accessible, and employees feel supported. A dedicated HR/payroll partner helps stabilize these areas.
5. Why should SMB manufacturers consider PeopleWorX?
PeopleWorX offers technology with a human touch, accurate payroll, modern HR tools, and a dedicated rep who understands your manufacturing workflows and compliance needs.
